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Minor League Baseball from 1998-2011

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Minor League Baseball from 1998-2011 Minor League Baseball Attendance: Tradition, Success and the Recession Jacob Louis Rosen – Honors Thesis Adviser: Dr. Tony Caporale Introduction and Goals Theoretical Framework Annual Attendance by Level Short- Purpose of this thesis was to advance the discourse on Minor League Baseball Thesis’ goal was to make season average attendance the dependent variable Year Rookie A High-A AA AAA Season season average attendance analysis. This thesis solely included the 160 which relates to a number of independent variables for an economic regression. affiliated Minor League Baseball teams that work alongside the 30 Major Chose five different groups of variables to be analyzed: classification level, 1998 1,331 2,875 2,663 1,970 3,980 6,052 market size, market saturation, per capita income and stadium age. League Baseball franchises, including information since 1998. 1999 1,264 2,979 2,623 2,013 3,942 5,913 Gained further understanding of industry through three main approaches: This thesis focused on market saturation since it’s new to the discourse. This 2000 1,231 2,934 2,895 1,941 4,177 6,489 variable counted number of major professional sports teams or similar Minor literature review, case studies and economic regression. Sources for data 2001 1,398 3,129 3,099 2,021 4,136 6,500 were Minor League Baseball’s communication office, Census Bureau and League Baseball teams in the given team’s combined statistical area as defined Bureau of Economic Analysis estimates through 2009. by the Census Bureau. This section connected case study storylines to 2002 1,400 3,371 3,072 2,000 4,092 6,600 practicality of Minor League Baseball markets and economics. 2003 1,526 3,341 3,381 2,015 4,413 6,588 2004 1,489 3,334 3,415 2,077 4,511 6,517 Literature Review Variables and Models 2005 1,521 3,288 3,528 2,099 4,538 6,734 Minor League History – Dates back to 19th century, fairly constant since 1970s; 2006 1,589 3,311 3,575 2,138 4,528 6,678 Professional Baseball Agreement limits growth by establishing territories for teams Classification level: rookie, ss, a, higha and aa 2007 1,733 3,445 3,717 2,199 4,603 6,802 Market size: metro (dummy) and msapop Local economic development – Contentious point in debate for new stadiums; Market saturation: csatms and csapro 2008 1,715 3,389 3,709 2,189 4,591 6,883 sources show it’s possible to evaluate profit for owners, not easy for regions Per capita income: msatpiPC 2009 1,698 3,367 3,697 2,253 4,463 6,820 Stadium age: age Attendance studies – Mixed results in league-by-league analysis over whether Dependent variable: avgatt 2010 1,512 3,343 3,675 2,264 4,492 6,664 attendance is a normal good with income, attendance; winning effects also debated 2011 1,520 3,317 3,569 2,339 4,419 6,524 Model 1 (Full): avgatt = β0 + β1rookie + β2ss + β3a + β4higha + β5aa + β6csapro + New stadium effects – Proven “honeymoon effect” that provides temporary boost β7csatms + β8csapop + β9csatpipc + β10age + β11micro + u Conclusions Promotional effects – Teams promote season average attendance with community Model 2 (Adjusted): avgatt = β0 + β1rookie + β2ss + β3a + β4higha + β5aa + All other variable groups had expected results, holding other involvement, scheduled promotional events and family-friendly atmosphere β csapro + β csatms + u 6 7 items constant: classification level, market size and per capita income increases led to higher attendance, while older stadium age led to decrease over time in attendance. Case Studies Regression Results Market saturation regression results were brand new. Tradition: Small markets, locally owned, moderate attendance expectations Coefficients (t-statistics) *** indicates significance at .01 level Number of major professional teams in area had POSITIVE Explanatory Variables Model 1 (Full) Model 2 (Adj.) impact on season average attendance; number of similar Minor Princeton Rays – Rookie Appalachian League; Princeton, W.V. Constant (β 6,554.6 (31.58)*** 6,768.3 (80.40)*** League Baseball teams in area had NEGATIVE impact. 0) Rookie -4,227.1 (-31.06)*** -4,693.0 (-36.95)*** Auburn Doubledays – Short-Season NY-Penn League; Auburn, N.Y. Affects future expansion plans in Minor League Baseball in SS -3,409.3 (-27.89)*** -3,689.4 (-32.27)*** connection to existing territorial rights. Could be beneficial to Lynchburg Hillcats – High-A Carolina League; Lynchburg, Va. A -3,296.9 (-30.77)*** -3,292.4 (-31.99)*** move team to proven, existing sports market, while it’s more High-A -4,626.0 (-41.77)*** -4,863.6 (-46.09)*** logically detrimental to have close, competing team. Success: New stadiums, big markets, extravagant promotional efforts AA -2,461.4 (-23.15)*** -2,429.5 (-23.67)*** In the future, I would like to continue to look at a larger sample CSAPro 248.2 (6.47)*** 407.4 (17.20)*** Columbus Clippers – Triple-A International League; Columbus, Ohio size of Minor League Baseball markets, including possible CSATms -432.6 (-9.20)*** -311.5 (-7.44)*** economic data from Canada, and interview more contacts Dayton Dragons – Single-A Midwest League; Dayton, Ohio CSAPop 7.5 *10^-5 (4.12)*** about the specific restrictions from the territorial rights outlined CSATpiPC 2.1 * 10^-2 (3.79)*** in the Professional Baseball Agreement. Richmond Flying Squirrels – Double-A Eastern League; Richmond, Va. Age -17.2 (-11.58)*** Recession: Rundown stadiums, non-baseball markets, out-of-town owners Micro -826.3 (-6.16)*** R2 0.6444 0.6002 Scranton/Wilkes-Barre Yankees – Triple-A International League; Scranton, Pa. 2 Adjusted R 0.6423 0.5990 West Virginia Power – Single-A South Atlantic League; Charleston, W.V. F-statistic 306.91 468.68 RMSE 1,394 1,462.2 Akron Aeros – Double-A Eastern League; Akron, Ohio n=sample size 1,875 2,192 degrees of freedom 11 7 .
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